EU Rejects Google/DoubleClick Deal (for Now)

Regulators in the European Union (EU) on Wednesday said they needed more time to investigate Google's planned $3.1 billion purchase of DoubleClick, which they say raises "competitive concerns." Now, the European Commission (EC) will decide no later than April 2, 2008 whether the acquisition violates EU competition laws.

Google had hoped to see the deal finalized by the end of the year. It is also under scrutiny in the US by the Federal Trade Commission (FTC). Both the FTC and EC have received numerous complaints from competitors and privacy advocates that the Google/DoubleClick deal would give Google an unfair advantage in online advertising and expose consumers to privacy risks.

"We will continue to work with the commission to demonstrate how our proposed acquisition will benefit publishers, advertisers and consumers," Google CEO Eric Schmidt said in response to the EU announcement. "We seek to avoid further delays that might put us at a disadvantage in competing fully against Microsoft, Yahoo, AOL and others whose acquisitions in the highly competitive online advertising market have already been approved."

Schmidt doesn't mention of course that those smaller acquisitions were made in response to Google's DoubleClick deal, and were defensive in nature. While Google already dominates the market for online search advertising with 70 to 80 percent market share, the DoubleClick acquisition would give the company a dominant position in online graphical advertising (banner ads and so on), giving the company a lock on the two most lucrative forms of advertising online.

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